{"id":72775,"date":"2026-08-19T12:55:00","date_gmt":"2026-08-19T19:55:00","guid":{"rendered":"https:\/\/www.sacregcf.org\/worth-a-read-copy-1\/"},"modified":"2026-08-19T14:28:09","modified_gmt":"2026-08-19T21:28:09","slug":"highs-and-lows","status":"publish","type":"post","link":"https:\/\/www.sacregcf.org\/vi\/highs-and-lows\/","title":{"rendered":"Highs and Lows: Reminding Clients About Stock Gifts"},"content":{"rendered":"\n

As an attorney, CPA, or financial advisor, you\u2019re well aware that your clients are typically better off from a tax perspective if they donate by giving appreciated stock held for more than one year instead of writing a check. That\u2019s because the client\u2019s charitable deduction is calculated based on the stock\u2019s fair market value, and the nonprofit (unlike your client) can sell the stock without triggering capital gains tax. Indeed, many of your clients regularly give appreciated stock to their Foundation funds.<\/p>\n\n\n\n

So, what happens when one of these clients starts asking questions about what\u2019s on their tax return? For instance: <\/p>\n\n\n\n

“Wait a minute. I distinctly remember that my stock was worth $81.95 per share when the market closed on the day I transferred 100 shares to the Sacramento Region Community Foundation to add to my Donor Advised Fund<\/a>. But my tax return is showing a deduction amount less than $8,195. Is that a mistake?”<\/p>\n\n\n\n

It’s a great question, and of course you know the answer! When a client contributes publicly traded securities to a fund at the Foundation\u2014or directly to another public charity\u2014the amount of the charitable deduction is indeed based on the fair market value of the asset at the time of the gift under Internal Revenue Code Section 170 and Treasury Regulation \u00a7 1.170A-1(c). For publicly traded securities, however, “fair market value” is not ordinarily the closing price. Instead, the IRS valuation rule generally uses the average between the highest and lowest quoted selling prices on the date of the contribution. This methodology appears in Treasury Regulation \u00a7 20.2031-2(b)(1), outlining the IRS\u2019s longstanding valuation rules.<\/p>\n\n\n\n

Here’s a simple example.<\/p>\n\n\n\n

Suppose a client transfers shares to a Donor Advised Fund at the Foundation on August 20. On that date:<\/p>\n\n\n\n